5. Practical Aspects of Property & Mortgage Law

Question 1

What is the aim of land registration?

Answer 1

To provide an accurate, up-to-date and continuing record of ownership of land, and registration enables the state to guarantee the validity of a title registered at the land registry.

The registration process can also alert perspective buyers and lenders to a variety of rights that third parties may have over land, and obligations that owners may have in respect of land.

Question 2

What is in the property register of the title deed?

Answer 2

Details of the land, the title number and the plan of the property (easement that are beneficial to the property will be included here)

Question 3

What is in the proprietorship register of title deed?

Answer 3

Gives the name and address of the estate and owner, the nature of the title, the date of registration and any property restrictions on ownership. It also sets out the class of the title

Question 4

What is in the charges register of the title deed?

Answer 4

Record any charges over the property such as the rights of any mortgagee, a non-owning spouse is interest notifiable under the family law act 1996 and negative easements and restrictive covenants

Question 5

What is absolute title?

Answer 5

When clear title is established. It’s the most secure title there is and the most desirable. It may be either freehold with good title, or leasehold with the lease is for at least 21 years and both the freeholder and the leaseholder can demonstrate good title

Question 6

What is good leasehold?

Answer 6

Can apply only in connection with leases of more than seven years. It means that the leasehold itself is good but that the freehold title is in doubt or the freeholder has not produced evidence of ownership to the land registry.

Absolute leasehold title cannot be given in this case because the land registry will not know if the landlord had the full and unrestricted power to grant police or if any restrictive covenants or other encumbrances affect the property

Question 7

What is possessory title?

Answer 7

It’s granted in situations where the applicant is unable to produce the title deeds or other proof of title when the property is first registered and can equally apply to freehold and leasehold property. This could be because the dates have been lost or destroyed.

Possessory title means the owner is registered as the owner but it does not provide protection from a claim from another person asserting that they owned the land before it was registered

Question 8

When can you upgrade possessory title to absolute for both registered an unregistered land?

Answer 8

For registered land, after 10 years without objection from any previous owner. For unregistered land, after 12 years without any objections from a previous owner

Question 9

What is a qualified title?

Answer 9

It’s very rare in occurs where there is some defect in the title is registered, and so absolutely good leasehold title cannot be guaranteed. The title is given, subject to any defect

Question 10

Why should transfer of registered land be completed within 30 days of completion?

Answer 10

The 30 days is referred to as the priority period during which the new owner has priority of other claims and charges.

Failure to register within 30 days could mean other interest may be registered and take higher priority. The priority is protected by means of an OS1 search

Question 11

What is the timescale in which an application for registration must take place for unregistered land?

Answer 11

Two months. Failure to do so invalidates the legal transfer which becomes void

Question 12

What is a root of the title search?

Answer 12

It is difficult for a conveyancer to establish a good title when unregistered land is sold. Therefore it is necessary to switch back over at least a 15 year history of the property in order to discover anything that might affect the rights of the owner

Question 13

What rights and obligations are attached to land?

Answer 13

Certain rights and obligations may affect the title to a particular property.

These are known as easements, positive covenants and restrictive covenants.

Easements and restrictive covenants are said to “run with the land”

Question 14

With regards to easement and restrictive covenants what does “running with the land” mean?

Answer 14

It means that the rights and obligations relating to a property are passed on to all subsequent purchasers who remain subject to their conditions

Question 15

What are easements?

Answer 15

It’s a right of way that one property has over the land of another. Examples include rights of way, rights to light, rights to ventilation, or even rights to hang a sign on another persons house

Question 16

What are the key points relating to easements?

Answer 16

An easement must involve two properties. // And easement attaches to, and is for the benefit of, the land, not the owner. // The two plots must be close to each other. // The land that enjoys the right over another site is called the dominant tenement. // The land of which the right is held is called the servient tenement. The dominant and servient tenement must be owned by different people. // with one or two exceptions, the easement cannot impose a positive burden on the servient tenement-in other words, insist that the owner does something. One major exception is that the easement can demand that the servient tenement fences the land

Question 17

What is a right of way?

Answer 17

You might need a right of way across someone else’s land in order to gain access to your own property. In this case, the right-of-way is essential to the maintenance of the value of your property.

On the other hand, many prospective buyers would regard the existence of a right of way over the land as an invasion of privacy. This could make the land less desirable and reduce its value.

Question 18

What is a right of light?

Answer 18

A right of light can be established when one person wants to build a property adjacent to another. The occupant of the existing property can take action to secure the right of light, effectively forcing the developer to build a certain minimum distance away from the existing property. It is a good example of a negative easement

Question 19

What is an easement by necessity?

Answer 19

It is assumed to be in place because it is necessary for the landowner in order to do something essential. A good example is it encirclement

Question 20

What is an encirclement?

Answer 20

Imagine a circle of land owned by one person encompassing a circle of land owned by another person. If the owner of the land in the centre must cross the encircling land to access the property, an easement by necessity can be implemented so that he has access to his land

Question 21

What are the main ways an easement can be extinguished?

Answer 21

The same person takes ownership of both the dominant and servient pieces of land // The easement reaches a formal expiration date // The owner of the dominant piece of land expressly terminate the easement by deed, usually as a result of negotiation with the other parties

Question 22

What are covenants?

Answer 22

 Covenants are essentially restrictions or conditions placed by a landowner on those who subsequently buy or lease the land. The person who established the covenant is referred to as the beneficiary, because the covenant is intended to benefit them in some way. Unlike easements, covenants apply to a single property

Question 23

What is a positive covenant and give an example?

Answer 23

A positive covenant states what a subsequent owner-occupier must do. The most common positive covenant is an obligation to maintain boundaries.

In a terrace of houses, a middle house will have boundaries with at least two neighbouring properties.

There will in most cases be a covenant specifying which boundary is the owner of the middle house’s responsibility. This will be shown clearly in the title deeds

Question 24

What is a restrictive covenant and give an example?

Answer 24

Restrictive covenant state what a subsequent owner-occupier must not do.

Some land has straightforward restrictions such as a prohibiting development on it, only permitting certain types of building, and so on.

Restrictive covenants run with the land which means that they relate to the property rather than the owner and I passed on to the next owner when the property is transferred

Question 25

What is chancel repair liability?

Answer 25

It originates from the Middle Ages when rectors received tithes (levies) from the parish instead of a stipend (salary).

Part of directors responsibility was to arrange and pay for repairs to the church’s chancel (The area around the altar) from tithes received, while the parishioners were responsible for repairs to the rest of the church.

As land was sold by the church, responsibility for chancel repairs was passed on with the land; the new owners were known as “lay rectors”, even though they had no religious role

Question 26

 What is a title guarantee?

Answer 26

Title guarantees provide certain levels of comfort as to the robustness of the title being conveyed.

For example, full title guarantee establishes that the property is free from charges of encumbrances (restrictions or limitations).

Limited title guarantee also give some guarantees, but not the categorical guarantee available with a full title guarantee.

Question 27

Irrespective of whether a property is transferred with full or limited title guarantee what is the vendor deemed to covenant?

Answer 27

That the vendor has the right to sell the property and they will do all that can be done to give the purchase of the title they require, including assistance with any details required by the land registry.

Question 28

If the vendor sells with full title guaranteewhat is the vendor deemed to covenant?

Answer 28

That they sell free from any charges and encumbrances, and free from any rights exerciseable by third parties, other than those of which they could not reasonably be expected to know

Question 29

If the windowsills with limited title guarantee what are they deemed to covenant?

Answer 29

Since they acquired the property, they have not created any charges or encumbrances that still subsist over it. And that as far as they know, no one else has done so either

Question 30

What are matrimonial interests?

Answer 30

Matrimonial interest are particularly important in regard to land registration. There are many properties where only one partner in the marriage is the registered owner. For older owners, these dates back to times when it was traditional for only the husband to be named as owner. There are also properties owned by an individual who met their spouse only after acquiring the property.

The legislation recognises the rights of a non-owning spouse to register an interest in the property through a formal entry on the charges register. This effectively prevents the property from being sold or transferred until the spouse’s notice is removed

Question 31

With regards to matrimonial interests what is the lender have to satisfy itself at application stage as to who exactly will occupy the property?

Answer 31

Because the legislation ensures that a non-owning spouse can continue in occupation of a property and provide the right of entry and occupation for those not already in occupation.

Any non-owning spouse who will not become a party to the mortgage can be asked to sign a consent to mortgage form, waiving rights of residence or announcing occupancy rights.

Question 32

What rights and obligations are set out by a mortgage deed?

Answer 32

The deed sets out the terms and conditions of the mortgage.

As part of the conditions, the deed stipulates the rights of the lender and the borrowers covenants - number of things they promise to do, which the lender can enforce if they fail to do so